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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended September 30, 2003



or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from  to



Commission File Number 0-12362



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Berger Holdings, Ltd.

(Exact Name of Registrant as Specified in its Charter)



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|Pennsylvania                                                   |  | 23-2160077                             
|-------------------------------------------------------------- |  | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)
|                                                               | 
|805 Pennsylvania Boulevard, Feasterville, PA                   |  | 19053                                  
|(Address of Principal Executive Offices)                       |  | (Zip Code)                             



Registrants
telephone number, including area code: (215) 355-1200



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(Former Name, Former Address and Former
Fiscal Year, if Changed Since Last Report)



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Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    YES  x    NO ̈



Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).    YES ̈NO  x



As of November 13, 2003, the
Registrant had outstanding 5,271,926 shares of its common stock, par value $0.01 per share (the Common Stock).



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##### Table of Contents

BERGER HOLDINGS, LTD.

INDEX



|                             |  |         |  |                                                                                                                 |  | Page
|---------------------------- |  | ------- |  | --------------------------------------------------------------------------------------------------------------- |  | ----
|                             | 
|PART I FINANCIAL INFORMATION |  |        
|                             |  |         | 
|                             |  | Item 1. |  | Financial Statements                                                                                            |  |     
|                             |  |         | 
|                             |  |         |  | Consolidated Balance Sheets at September 30, 2003 (unaudited) and December 31, 2002 (audited)                   |  | 3   
|                             |  |         | 
|                             |  |         |  | Consolidated Statements of Operations (unaudited) for the three-month periods ended September 30, 2003 and 2002 |  | 4   
|                             |  |         | 
|                             |  |         |  | Consolidated Statements of Operations (unaudited) for the nine-month periods ended September 30, 2003 and 2002  |  | 5   
|                             |  |         | 
|                             |  |         |  | Consolidated Statements of Cash Flows (unaudited) for the nine-month periods ended September 30, 2003 and 2002  |  | 6   
|                             |  |         | 
|                             |  |         |  | Notes to Consolidated Financial Statements (unaudited)                                                          |  | 7   
|                             |  |         | 
|                             |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                           |  | 10  
|                             |  |         | 
|                             |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                                      |  | 14  
|                             |  |         | 
|                             |  | Item 4. |  | Controls and Procedures                                                                                         |  | 14  
|                             | 
|PART II OTHER INFORMATION    |  |        
|                             |  |         | 
|                             |  | Item 1. |  | Legal Proceedings                                                                                               |  | 15  
|                             |  |         | 
|                             |  | Item 2. |  | Changes in Securities and Use of Proceeds                                                                       |  | 15  
|                             |  |         | 
|                             |  | Item 3. |  | Defaults Upon Senior Securities                                                                                 |  | 15  
|                             |  |         | 
|                             |  | Item 4. |  | Submission of Matters to a Vote of Security Holders                                                             |  | 15  
|                             |  |         | 
|                             |  | Item 5. |  | Other Information                                                                                               |  | 15  
|                             |  |         | 
|                             |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                                                |  | 16  
|                             | 
|SIGNATURES                   |  | 17     



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BERGER HOLDINGS, LTD.

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                                                |  | September 30,2003 (unaudited) |            |   | December 31,2002 (audited) |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ---------- | - | -------------------------- | -
|ASSETS                                                                                                                                                                                          |  |                               |            |   |                            |  
|                                                                                                                                                                                                |  |                              
|Current assets                                                                                                                                                                                  |  |                               |            |   |                            |  
|Cash and cash equivalents                                                                                                                                                                       |  | $                             | 54,120     |   |                            | $
|Accounts receivable, net of allowance for doubtful accounts of $30,000 in 2003 and 2002                                                                                                         |  |                               | 5,464,547  |   |                            |  
|Inventories                                                                                                                                                                                     |  |                               | 6,316,196  |   |                            |  
|Prepaid and other current assets                                                                                                                                                                |  |                               | 788,835    |   |                            |  
|Deferred income taxes                                                                                                                                                                           |  |                               | 51,081     |   |                            |  
|                                                                                                                                                                                                |  |                               |            |   |                            |  
|Total current assets                                                                                                                                                                            |  |                               | 12,674,779 |   |                            |  
|                                                                                                                                                                                                |  |                              
|Property, plant and equipment, net                                                                                                                                                              |  |                               | 9,178,638  |   |                            |  
|Identifiable intangible assets, net                                                                                                                                                             |  |                               | 2,403,306  |   |                            |  
|Goodwill, net                                                                                                                                                                                   |  |                               | 10,087,476 |   |                            |  
|Other                                                                                                                                                                                           |  |                               | 115,014    |   |                            |  
|                                                                                                                                                                                                |  |                               |            |   |                            |  
|Total assets                                                                                                                                                                                    |  | $                             | 34,459,213 |   |                            | $
|                                                                                                                                                                                                |  |                               |            |   |                            |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                            |  |                               |            |   |                            |  
|                                                                                                                                                                                                |  |                              
|Current liabilities                                                                                                                                                                             |  |                               |            |   |                            |  
|Current maturities of long-term debt                                                                                                                                                            |  | $                             | 2,163,140  |   |                            | $
|Accounts payable                                                                                                                                                                                |  |                               | 4,804,952  |   |                            |  
|Accrued expenses                                                                                                                                                                                |  |                               | 2,270,318  |   |                            |  
|                                                                                                                                                                                                |  |                               |            |   |                            |  
|Total current liabilities                                                                                                                                                                       |  |                               | 9,238,410  |   |                            |  
|                                                                                                                                                                                                |  |                               |            |   |                            |  
|Long-term debt                                                                                                                                                                                  |  |                               | 9,574,182  |   |                            |  
|                                                                                                                                                                                                |  |                               |            |   |                            |  
|Deferred income taxes                                                                                                                                                                           |  |                               | 318,617    |   |                            |  
|                                                                                                                                                                                                |  |                               |            |   |                            |  
|Commitments and contingencies                                                                                                                                                                   |  |                               |            |   |                            |  
|                                                                                                                                                                                                |  |                              
|Shareholders equity                                                                                                                                                                            |  |                               |            |   |                            |  
|Common stock, $.01 par value - Authorized 20,000,000 shares in 2003 and 2002 Issued 5,271,926 and 5,091,038 shares in 2003 and 2002 Outstanding 5,271,926 and 5,024,888 shares in 2003 and 2002 |  |                               | 52,719     |   |                            |  
|Additional paid-in-capital                                                                                                                                                                      |  |                               | 15,936,417 |   |                            |  
|Accumulated deficit                                                                                                                                                                             |  |                               | (661,132   | ) |                            |  
|Less 66,150 common shares of treasury stock in 2002, at cost                                                                                                                                    |  |                               |           |   |                            |  
|                                                                                                                                                                                                |  |                               |            |   |                            |  
|Total shareholders equity                                                                                                                                                                      |  |                               | 15,328,004 |   |                            |  
|                                                                                                                                                                                                |  |                               |            |   |                            |  
|Total liabilities and shareholders equity                                                                                                                                                      |  | $                             | 34,459,213 |   |                            | $
|                                                                                                                                                                                                |  |                               |            |   |                            |  



See accompanying notes
to consolidated financial statements



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BERGER HOLDINGS, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



|                                                         |  | Three-Months EndedSeptember 30,
|-------------------------------------------------------- |  | -------------------------------
|                                                         |  | 2003                           
|Net sales                                                |  | $                              
|                                                         |  |                                
|Cost of sales                                            |  |                                
|                                                         |  |                                
|Gross profit                                             |  |                                
|                                                         |  |                                
|Selling, administrative and general expenses             |  |                                
|                                                         |  |                                
|Income from operations                                   |  |                                
|                                                         |  |                                
|Interest expense                                         |  |                                
|                                                         |  |                                
|Other income, net                                        |  |                                
|                                                         |  |                                
|Income before income taxes                               |  |                                
|                                                         |  |                                
|Income taxes                                             |  |                                
|                                                         |  |                                
|Net income                                               |  | $                              
|                                                         |  |                                
|Basic earnings per share                                 |  | $                              
|                                                         |  |                                
|Basic weighted average common shares outstanding         |  |                                
|                                                         |  |                                
|Diluted earnings per share                               |  | $                              
|                                                         |  |                                
|Weighted average common shares outstanding               |  |                                
|Add: effect of vested and non-vested dilutive securities |  |                                
|                                                         |  |                                
|Diluted weighted average common shares outstanding       |  |                                
|                                                         |  |                                



See accompanying notes
to consolidated financial statements



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##### Table of Contents

BERGER HOLDINGS, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



|                                                         |  | Nine-Months Ended September 30,
|-------------------------------------------------------- |  | -------------------------------
|                                                         |  | 2003                           
|Net sales                                                |  | $                              
|                                                         |  |                                
|Cost of sales                                            |  |                                
|                                                         |  |                                
|Gross profit                                             |  |                                
|                                                         |  |                                
|Selling, administrative and general expenses             |  |                                
|                                                         |  |                                
|Income from operations                                   |  |                                
|                                                         |  |                                
|Interest expense                                         |  |                                
|                                                         |  |                                
|Other income, net                                        |  |                                
|                                                         |  |                                
|Income before income taxes                               |  |                                
|                                                         |  |                                
|Income taxes                                             |  |                                
|                                                         |  |                                
|Net income                                               |  | $                              
|                                                         |  |                                
|Basic earnings per share                                 |  | $                              
|                                                         |  |                                
|Basic weighted average common shares outstanding         |  |                                
|                                                         |  |                                
|Diluted earnings per share                               |  | $                              
|                                                         |  |                                
|Weighted average common shares outstanding               |  |                                
|Add: effect of vested and non-vested dilutive securities |  |                                
|                                                         |  |                                
|Diluted weighted average common shares outstanding       |  |                                
|                                                         |  |                                



See accompanying notes
to consolidated financial statements



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BERGER HOLDINGS, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



|                                                                                 |  | Nine-Months EndedSeptember 30, |           
|-------------------------------------------------------------------------------- |  | ------------------------------ | ----------
|                                                                                 |  | 2003                           |           
|Cash flows from operating activities                                             |  |                                |           
|Net income                                                                       |  | $                              | 727,860   
|Adjustments to reconcile net income to net cash provided by operating activities |  |                                |           
|Depreciation and amortization                                                    |  |                                | 1,410,000 
|Tax benefit from exercise of employee stock options                              |  |                                | 282,664   
|Bad debt provision                                                               |  |                                |          
|Loss on disposition of assets                                                    |  |                                |          
|Change in operating assets and liabilities                                       |  |                                |           
|Accounts receivable                                                              |  |                                | (2,147,966
|Inventories                                                                      |  |                                | 170,830   
|Prepaid and other assets                                                         |  |                                | (236,195  
|Accounts payable                                                                 |  |                                | 1,642,590 
|Accrued expenses                                                                 |  |                                | 243,450   
|                                                                                 |  |                                |           
|Net cash provided by operating activities                                        |  |                                | 2,093,233 
|                                                                                 |  |                                |           
|Cash flows from investing activities                                             |  |                                |           
|Purchase of property and equipment / change in deposits on property              |  |                                | (552,524  
|                                                                                 |  |                                |           
|Net cash used in investing activities                                            |  |                                | (552,524  
|                                                                                 |  |                                |           
|Cash flows from financing activities                                             |  |                                |           
|                                                                                 |  |                               
|Net repayments on working capital line                                           |  |                                | (544,000  
|Proceeds from term loans                                                         |  |                                | 1,250,000 
|Repayments of long-term debt                                                     |  |                                | (1,907,143
|Capital leases and mortgage repayments                                           |  |                                | (563,975  
|Proceeds from the issuance of stock and stock options                            |  |                                | 59,109    
|Repurchase of common stock                                                       |  |                                |          
|                                                                                 |  |                                |           
|Net cash used in financing activities                                            |  |                                | (1,706,009
|                                                                                 |  |                                |           
|Net decrease in cash and cash equivalents                                        |  |                                | (165,300  
|                                                                                 |  |                               
|Cash and cash equivalents, beginning of period                                   |  |                                | 219,420   
|                                                                                 |  |                                |           
|Cash and cash equivalents, end of period                                         |  | $                              | 54,120    
|                                                                                 |  |                                |           
|Supplemental Disclosure of Cash Flow Information                                 |  |                                |           
|                                                                                 |  |                               
|Cash paid during the period for interest                                         |  | $                              | 603,632   
|                                                                                 |  |                                |           
|Cash paid during the period for income taxes                                     |  | $                              | 137,947   
|                                                                                 |  |                                |           



See accompanying notes
to consolidated financial statements



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BERGER HOLDINGS, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)



Note 1. Basis of Presentation:



The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments)
considered necessary for a fair presentation have been included.



The financial statements include the accounts of Berger Holdings, Ltd. and its wholly owned subsidiaries, Berger Financial Corp., Berger Bros Company, Copper Craft, Inc. and Walker Metal Products, Inc. (collectively, the
Company). All inter-company transactions and balances have been eliminated.



The Company manufactures and distributes roof drainage systems for both residential and commercial roofs. The Companys roof drainage product line, consisting of gutters, downspouts, soffits, fascias, snow
guards, trim coil, custom metal architectural pieces, and other associated accessories and fittings, is manufactured by the Company at its facilities located in Pennsylvania, Texas and Georgia. The Company sells roof drainage and ancillary products
to wholesale distributors who sell directly to roofers and contractors for use in the repair and replacement of roof drainage systems in existing buildings or for use in new construction. The principal raw materials used in manufacturing the
Companys roof drainage and ancillary products are aluminum, steel and copper.



The December 31, 2002 consolidated balance sheet has been reclassified to reflect the restoration of certain shares of common stock previously held in treasury to the status of authorized, but unissued shares pursuant
to section 1552 of the Pennsylvania Business Corporation Law.



Note 2.
Tender Offer



On October 10, 2003, the Company entered
into an Agreement and Plan of Merger pursuant to which Euramax International, Inc. (Euramax) is to acquire the Company. In accordance with the terms of the definitive agreement, on October 20, 2003, an indirect wholly-owned subsidiary of
Euramax commenced a cash tender offer to acquire all of the Companys outstanding shares of stock at a price of $3.90 per share (the Offer Price). Following successful completion of the tender offer, any remaining outstanding shares
of stock of the Company will be acquired in a cash merger at the Offer Price. The consummation of the transaction is subject to customary conditions, including that at least 80% of the outstanding shares (the Required Percentage) are
tendered in the tender offer.



The Company and Euramax have
also entered into a Stock Option Agreement pursuant to which Euramax has the right under certain circumstances to purchase shares from the Company at the Offer Price to reach the Required Percentage. Certain shareholders of the Company holding stock
and options representing in the aggregate approximately 40% of the total outstanding shares of the Company on a fully diluted basis have entered into a Tender and Option Agreement with Euramax under which they have agreed, among other things, to
tender their shares into the offer and to make an aggregate of $253,695 in incentive payments to Euramax to induce Euramax to consummate the transaction.



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Note 3. Stock Options:



The Company applies the intrinsic-value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations, to account for its fixed-plan stock options. Under this method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the
exercise price. SFAS No. 123, Accounting for Stock-Based Compensation, established accounting and disclosure requirements using a fair-value-based method of accounting for stock-based employee compensation plans. As allowed by SFAS No.
123, as amended in SFAS No. 148, the Company has elected to continue to apply the intrinsic-value-based method of accounting described above, and has adopted only the disclosure requirements.



Had compensation cost for the Companys common stock options been
determined based upon the fair value of the options at the date of grant, as prescribed under SFAS No. 123, as amended by SFAS No. 148, the Companys net income and earnings per share would have been the following pro forma amounts:



|                                                                                                                                            |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30,
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | ------------------------------
|                                                                                                                                            |  | 2003                            |         | 2002                          
|Net income, as reported                                                                                                                     |  | $                               | 553,886 |                               
|                                                                                                                                            |  |                                 |         |                               
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related
tax effects |  |                                 | 5,338   |                               
|                                                                                                                                            |  |                                 |         |                               
|Pro forma net income                                                                                                                        |  | $                               | 548,548 |                               
|                                                                                                                                            |  |                                 |         |                               
|Earnings per share:                                                                                                                         |  |                                 |         |                               
|                                                                                                                                            |  |                                 |         |                               
|Basic-as reported                                                                                                                           |  | $                               | .11     |                               
|                                                                                                                                            |  |                                 |         |                               
|Basic-pro forma                                                                                                                             |  | $                               | .10     |                               
|                                                                                                                                            |  |                                 |         |                               
|Diluted-as reported                                                                                                                         |  | $                               | .09     |                               
|                                                                                                                                            |  |                                 |         |                               
|Diluted-pro forma                                                                                                                           |  | $                               | .09     |                               
|                                                                                                                                            |  |                                 |         |                               



The fair value of the
options granted is estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:



|                        |  | Three Months EndedSeptember 30, |   |  | Nine Months EndedSeptember 30, |  
|----------------------- |  | ------------------------------- | - |  | ------------------------------ | -
|                        |  | 2003                            |   |  | 2002                           |  
|Risk-free interest rate |  | 3.83                            | % |  | 5.42                           | %
|                        |  |                                 |   | 
|Volatility              |  | 72                              | % |  | 72                             | %
|                        |  |                                 |   | 
|Expected dividend yield |  | 0                               | % |  | 0                              | %
|                        |  |                                 |   | 
|Expected option life    |  | 10 years                        |   |  | 10 years                       |  



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Note 4. New Accounting Pronouncements:



In January 2003, the FASB issued FIN No. 46, which addresses consolidation by business enterprises of variable interest
entities. This interpretation clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to certain entities in which equity investors do not have the characteristics of a controlling financial
interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN No. 46 is applicable to variable interest entities created after January 31, 2003,
and to variable interest entities in which an enterprise obtains an interest after that date. A company with a variable interest in a variable interest entity created before February 1, 2003 shall apply the provisions of FIN No. 46 effective
December 31, 2003. The adoption of FIN No. 46 is not expected to have an effect on the Companys consolidated financial statements.



The FASB has recently issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities and SFAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. The adoption of these accounting pronouncements did not have an impact on the Companys consolidated financial position or results of
operations.



Note 5. Inventories:



Inventories are valued at the lower of cost or market. Cost is determined
using the weighted average method.



Components of inventories
consist of the following:



|                            |  | September 30,2003 |           | December 31,2002
|--------------------------- |  | ----------------- | --------- | ----------------
|Raw materials and packaging |  | $                 | 3,535,534 |                 
|Finished goods              |  |                   | 2,780,662 |                 
|                            |  |                   |           |                 
|Total inventories           |  | $                 | 6,316,196 |                 
|                            |  |                   |           |                 



Note 6. Debt:



Effective June 13, 2002, the Company replaced its credit facility from Fleet
Bank, N.A., formerly Summit Bank, N.A., with a credit facility from Wachovia Bank, National Association. The working capital loan obtained from the bank provides $9,500,000 of financing for a three-year term, with the borrowings bearing interest at
LIBOR plus 2.75 percent, not to exceed the banks prime rate. Interest is payable monthly. Borrowings under this working capital facility were $2,982,383 at September 30, 2003.



The Company also obtained a term loan from the bank, which provided $2,400,000 of financing, with the borrowings bearing
interest at LIBOR plus 2.60 percent, not to exceed the banks prime rate. Monthly principal payments of approximately $29,000 are required. This term loan is due June 1, 2009. The Company obtained a second term loan from the bank on August 19,
2002, which provided $2,400,000 of financing, with the borrowings bearing interest at LIBOR plus 2.25 percent, not to exceed the banks prime rate. Monthly principal payments of $100,000 are required. The second term loan was used to redeem
$2,500,000 of the Companys 11% Subordinated Debenture. The second term loan is due August 1, 2004. The Company obtained a third term loan from the bank on January 31, 2003, which provided $750,000 of financing, with borrowings bearing interest
at LIBOR plus 3.00 percent, not to exceed the banks prime rate. Monthly payments of $125,000 beginning on September 1, 2004 and ending on February 1, 2005 are required. The proceeds of the third term note were used to pay down one-half of the
principal balance of $1,500,000 of the Companys 10% Subordinated Debenture, which was originally due on December 31, 2003. The Company obtained a fourth term loan from the bank on September 29, 2003, which provided $500,000 of financing, with
borrowing bearing interest at LIBOR plus 3.00 percent, not to exceed the banks prime rate. Monthly payments of approximately $13,900 beginning November 1, 2003 and ending October 1, 2006 are required. The proceeds of the fourth term note were
used to finance equipment. Total borrowings under these four term loans were $4,321,428 at September 30, 2003. The LIBOR on September 30, 2003 was 1.12%.



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Effective January 31, 2003, the maturity date for the $750,000 of remaining principal balance of the 10%
Subordinated Debenture was extended to June 30, 2005 and the annual interest rate was increased to 12% for 2003, to 13% for 2004, and 14% for 2005.



All of the Companys loans with the bank are subject to certain financial covenants, which are monitored on a quarterly basis. The working capital
facility and term loans are secured by all of the Companys assets. On May 9, 2003, the Company and the bank amended certain of these financial covenants. As of September 30, 2003, the Company met all of the financial covenants, as amended.



In addition to the above, at September 30, 2003, the Company
had a mortgage loan of $2,292,559, capital leases of $590,952, and a note payable of $800,000 from a prior acquisition.



Note 7. Repurchase of Common Stock:



In May 1999, the Company received approval from its Board of Directors to begin an open market stock repurchase program under which the aggregate number
of shares currently authorized for repurchase is 1,560,000. Of this amount, the Company has repurchased a total of 814,625 shares, excluding the private purchase of 154,000 shares from various investors, as of September 30, 2003. Repurchases may
continue to be made from time to time through open market purchases or privately negotiated transactions at the discretion of the Company. The amount and timing of the repurchases will depend on market conditions and other factors. There were no
purchases under this program during the nine months ended September 30, 2003.



Note 8. Income Taxes:



Consolidated income tax
expense for the three-month and nine-month periods ended September 30, 2003 results in an effective tax rate of 40.0%. Consolidated income tax expense for the three-month period ended September 30, 2002 results in an effective rate of 39.5%, while
the nine-month period ended September 30, 2002 results in an effective rate of 42.0%. The overall 2002 effective income tax rate was 43.0%, and the effective tax rate for 2003 reflects an estimate of pretax income, non-deductible expenses and state
taxes. The higher effective tax rate in 2002 versus 2003 is primarily due to certain permanent non-deductible items incurred in 2002 and not in 2003.



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operation



Results of Operations  Three Months Ended September 30, 2003 and 2002



Sales for the three-month period ended September 30, 2003 (the Current Quarter) were $13,687,983, an increase of
13.8%, or $1,661,638, as compared to $12,026,345 for the three-month period ended September 30, 2002 (the Comparable Quarter). This increase in sales is attributable to the pent up demand due to the severe winter weather and growth
within the existing business.



Cost of sales was $11,190,497 in
the Current Quarter as compared to $9,624,948 in the Comparable Quarter. As a percentage of net sales, cost of sales increased to 81.8% in the Current Quarter from 80.0% in the Comparable Quarter. This percentage increase is mainly attributable to
increases in aluminum and other raw material costs during the Current Quarter as compared to the Comparable Quarter and reductions in sales prices on certain products due to increased competition.



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Selling, administrative and general expenses were $1,398,986 in the Current Quarter as compared to
$1,427,947 in the Comparable Quarter. As a percentage of net sales, selling, administrative and general expenses decreased to 10.2% in the Current Quarter compared to 11.9% in the Comparable Quarter. This decrease in expenses is primarily the result
of a reduction in payroll and other operating expenses.



Income
from operations in the Current Quarter was $1,098,500, an increase of $125,050, as compared to income from operations of $973,450 in the Comparable Quarter. This increase in operating results during the Current Quarter is due to increased sales and
reductions in selling, administrative and general expenses.



Interest expense for the Current Quarter was $180,222, a decrease of $108,096 or 37.5%, versus $288,318 for the Comparable Quarter. The decrease in interest expense is due to reduced principal balances and reduced interest rates on new term
loans that were used to pay down higher interest rate loans.



Income taxes for the Current Quarter were $369,258 versus $274,204 for the Comparable Quarter. This increase is due to the increased pretax income and an increase in the effective tax rate from 39.5% to 40.0% as described in Note 7 to the
Companys consolidated financial statements.



During the Current Quarter, the Company reported net income of $553,886, an increase of $134,276, as compared to net income of $419,610 for the Comparable Quarter. This increase in net income is a result of higher sales and reductions in
selling, administrative and general expenses and interest expense as described above.



Results of Operations  Nine Months Ended September 30, 2003 and 2002



Sales for the nine-month period ended September 30, 2003 (the Current Nine Months) were $35,129,451, an increase of 3.5%, or $1,193,420, as compared to $33,936,031 for the nine-month period ended September
30, 2002 (the Comparable Nine Months). This increase in sales is attributable to sales growth during the Current Quarter as described above.



Cost of sales was $29,242,647 in the Current Nine Months as compared to $27,062,632 in the Comparable Nine Months. As a percentage of net sales, cost of
sales increased to 83.2% in the Current Nine Months from 79.7% in the Comparable Nine Months. This percentage increase is mainly attributable to increases in aluminum and other raw material costs during the Current Nine Months as compared to the
Comparable Nine Months, reductions in sales prices on certain products due to increased competition and the Companys inability to absorb fixed operating costs during the first three months of 2003 due to reduced levels of production based on
lower sales levels due to the harsh winter weather in the Companys core market.



Selling, administrative and general expenses were $4,097,233 in the Current Nine Months as compared to $4,448,022 in the Comparable Nine Months. As a percentage of net sales, selling, administrative and general
expenses decreased to 11.7% in the Current Nine Months compared to 13.1% in the Comparable Nine Months. This decrease in expenses is primarily the result of a reduction in payroll and other operating expenses.



Income from operations in the Current Nine Months was $1,789,571, a decrease
of $635,806, as compared to income from operations of $2,425,377 in the Comparable Nine Months. This decrease in operating results during the Current Nine Months is the result of the lower gross margin on sales due to the increased cost of sales
described above, partially offset by reductions in selling, administrative and general expenses.



Interest expense for the Current Nine Months was $591,612, a decrease of $301,002 or 33.7%, versus $892,614 for the Comparable Nine Months. The decrease
in interest expense is due to reduced principal balances and reduced interest rates on new term loans that were used to pay down higher interest rate loans.



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Income taxes for the Current Nine Months were $485,240 versus $652,560 for the Comparable Nine Months.
This decrease is due to the reduced pretax income as described above and a reduction in the effective tax rate from 42.0% to 40.0% as described in Note 7 to the Companys consolidated financial statements.



During the Current Nine Months, the Company reported net income of $727,860,
a decrease of $173,294, as compared to net income of $901,154 for the Comparable Nine Months. This decrease in net income is a result of lower income from operations as described above, partially offset by reductions in interest expense and income
taxes as described above.



Liquidity and Capital Resources



At September 30, 2003, the Company had long-term debt consisting of
working capital loans of $2,982,383, term loans of $4,321,428, a subordinated debenture with a remaining principal balance of $750,000, a note payable of $800,000 from a prior acquisition, capital leases of $590,952 and a mortgage for $2,292,559,
resulting in total debt outstanding of $11,737,322.



At
September 30, 2003, working capital was $3,436,369, resulting in a current ratio of 1.4 to 1, as compared to working capital of $3,287,711 and a ratio of 1.4 to 1 at December 31, 2002. This change in working capital is primarily the result of
increases in accounts receivable, partially offset by increases in accounts payable and accrued expenses, due to the seasonality of the Companys business.



Current liabilities at September 30, 2003 totaled $9,238,410, consisting primarily of $7,075,270 in accounts payable and accrued expenses and
$2,163,140 in current maturities of long-term debt. At December 31, 2002, total current liabilities were $7,392,085, consisting primarily of $5,189,230 in accounts payable and accrued expenses and $2,202,855 in current maturities of long-term debt.
The increase in current liabilities is primarily due to increases in accounts payable and accrued expenses to support the seasonality of the Companys business.



At September 30, 2003, the Company had shareholders equity of $15,328,004, as compared to $14,258,371 at December 31,
2002. This change is primarily attributable to the Current Nine Months net income and cash payments and tax benefits from the exercise of stock options.



Net cash provided by operating activities for the Current Nine Months was $2,093,233 as compared to $1,468,045 in the Comparable Nine Months. This
increase is due to a seasonal increase in accounts receivable, accounts payable and accrued expenses due to the timing of sales and purchase of material, offset by reductions in the Current Nine Months net income, depreciation and amortization and
inventories.



Net cash used in investing activities was
$552,524 in the Current Nine Months as compared to $476,199 net cash used in the Comparable Nine Months. Net cash used in investing activities in both the Current and Comparable Nine Months was used to upgrade facilities and purchase new equipment.



Net cash used in financing activities totaled $1,706,009 in
the Current Nine Months as compared to $1,398,243 net cash used in the Comparable Nine Months. This change is primarily due to the pay down of debt from cash generated from operating activities. Net cash used in financing activities during the
Comparable Nine Months was used to pay down debt and purchase Common Stock.



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The Companys contractual obligations and commercial commitments over the next five years and beyond
are as follows:



|                            |  | Expected Cash Payments by Year (in thousands) |     |     
|--------------------------- |  | --------------------------------------------- | --- | ----
|Contractual Commitments     |  | Remainderof 2003                              |     | 2004
|Revolving credit            |  | $                                             |    |     
|                            |  |                                               |     |     
|Long term debt              |  |                                               | 455 |     
|                            |  |                                               |     |     
|Capital lease obligations   |  |                                               | 108 |     
|                            |  |                                               |     |     
|Operating lease obligations |  |                                               | 217 |     
|                            |  |                                               |     |     
|Total                       |  | $                                             | 780 |     
|                            |  |                                               |     |     



The Companys
management believes that cash flows from operations and available sources of financing are adequate for the Companys anticipated financing needs in the near term. As described in Note 5 to the Companys consolidated financial statements,
the Company obtained a new credit facility on June 13, 2002. The cost and terms of any future financing arrangements will depend on market conditions and the Companys financial position at that time.



New Accounting Pronouncements



In January 2003, the FASB issued FIN No. 46, which addresses consolidation
by business enterprises of variable interest entities. This interpretation clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN No. 46 is applicable to variable interest
entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. A company with a variable interest in a variable interest entity created before February 1, 2003 shall apply the
provisions of FIN No. 46 effective December 31, 2003. The adoption of FIN No. 46 is not expected to have an effect on the Companys consolidated financial statements.



The FASB has recently issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities and SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. The adoption of these accounting pronouncements did not have an impact on the Companys
consolidated financial position or results of operations.



Forward-Looking
Statements



The information presented herein contains
predictions, estimates and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results, performance and achievements of the Company to differ materially from those expressed or implied by such forward-looking statements. Although management believes its plans, intentions
and expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that such plans, intentions, expectations, objects or goals will be achieved. Important factors that could cause actual
results to differ materially from those included in the forward-looking statements include but are not limited to: increases in the cost of raw materials; fluctuations in demand for the Companys products; weather conditions; future
acquisitions; attempts to expand the Companys operations; integration of acquired businesses; need for additional financing; competition; and dependence on key personnel.



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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.



For information regarding the Companys exposure to certain market risks, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in
the Companys Annual Report on Form 10-K for the year ended December 31, 2002. There have been no significant changes since December 31, 2002 in the Companys portfolio of financial instruments or market risk exposures.



ITEM 4. Controls and Procedures.



The Companys management carried out an evaluation, under the supervision and with the participation of the Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Companys disclosure
controls and procedures (pursuant to the Rule 13a-14 of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Companys Chief Executive Officer and Chief Financial Officer
concluded that the Companys disclosure controls and procedures are effective.



In addition, there were no changes in the Companys internal control over financial reporting that occurred during the period covered by this report that have materially affected or are reasonably likely to
materially affect these internal controls over financial reporting.



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PART II - OTHER INFORMATION



Item 1 - Legal Proceedings



None.



Item 2 - Changes in Securities and Use of Proceeds.



(a) Not applicable.



(b) Not
applicable.



(c) Not applicable.



(d) Not applicable.



Item 3 - Defaults Upon Senior Securities.



None.



Item 4 - Submission of Matters to a Vote of Securities Holders.



The Companys 2003 Annual Meeting of Shareholders (the Meeting) was held on July 30, 2003 at the Companys headquarters in Feasterville, Pennsylvania. At the Meeting, Theodore A. Schwartz, Jay
Seid and Dr. Jon Kraut were re-elected as directors of the Company, with terms to expire in the year 2006 or until their successors in office have been duly elected and qualified. Francis E. Wellock was elected as a director of the Company, with a
term to expire in the year 2004 or until his successor in office has been duly elected and qualified. With regard to Mr. Schwartz, 4,363,028 votes were cast in favor of his election, 253,653 against and 21,139 abstained. With regard to Mr. Seid,
4,609,113 votes were cast in favor of his election, 7,568 against and 21,139 abstained. With regard to Dr. Kraut, 4,614,113 votes were cast in favor of his election, 2,568 against and 21,139 abstained. With regard to Mr. Wellock, 4,613,030 votes
were cast in favor of his election, 3,651 against and 21,139 abstained.



The following directors have terms of office that continued after the Meeting: Joseph F. Weiderman, Paul. L. Spiese, III, Larry Falcon, John P. Kirwin III, and Dr. Jacob Haft.



Item 5 - Other Information.



On
October 10, 2003, the Company entered into an Agreement and Plan of Merger pursuant to which Euramax International, Inc. (Euramax) is to acquire the Company.



In accordance with the terms of the definitive agreement, on October 20, 2003, an indirect wholly-owned subsidiary of
Euramax commenced a cash tender offer to acquire all of the Companys outstanding shares of stock at a price of $3.90 per share (the Offer Price). Following successful completion of the tender offer, any remaining outstanding shares
of stock of the Company will be acquired in a cash merger at the Offer Price. The consummation of the transaction is subject to customary conditions, including that at least 80% of the outstanding shares (the Required Percentage) are
tendered in the tender offer.



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The Company and Euramax have also entered into a Stock Option Agreement pursuant to which Euramax has the
right under certain circumstances to purchase shares from the Company at the Offer Price to reach the Required Percentage.



Certain shareholders of the Company holding stock and options representing in the aggregate approximately 40% of the total outstanding shares of the
Company on a fully diluted basis have entered into a Tender and Option Agreement with Euramax under which they have agreed, among other things, to tender their shares into the offer and to make an aggregate of $253,695 in incentive payments to
Euramax to induce Euramax to consummate the transaction.



Copies of the Agreement and Plan of Merger, the Tender and Option Agreement, the Stock Option Agreement and a joint press release dated October 13, 2003 were included as exhibits to the Form 8-K filed by the Company on October 14, 2003.



Item 6 - Exhibits and Reports on Form 8-K.



(a)

Exhibit 10.1

Agreement and Plan of Merger dated October 10, 2003 (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed October 14,
2003).Exhibit 10.2

Tender and Option Agreement dated October 10, 2003 (incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed October 14,
2003).Exhibit 10.3

Stock Option Agreement dated October 10, 2003 (incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed October 14, 2003).Exhibit 10.4

Fourth Amendment and Modification to Loan and Security Agreement, dated September 29, 2003, among Berger Holdings, Ltd., Berger Financial Corp., Berger Bros Company, Copper Craft,
Inc., Walker Metal Products, Inc., and Wachovia Bank, National Association.*Exhibit 31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*Exhibit 31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*Exhibit 32

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.*Exhibit 99

Press Release dated November 14, 2003.*


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|* | Filed electronically herewith.
|- | ------------------------------



| | (b) | None.
| | --- | -----



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SIGNATURES



Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



BERGER HOLDINGS, LTD.By:/s/ JOSEPH F. WEIDERMANJoseph F. WeidermanChief Executive Officer and PresidentBy:/s/ FRANCIS E. WELLOCK, JR.Francis E. Wellock, Jr.Executive Vice President - Finance and Chief Financial Officer(Principal Financial and Accounting Officer)Date: November 14, 2003




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